Key Challenges for CAs in GSTR-9 Annual Return Filing

The GSTR-9 annual return for Financial Year 2023-24 is currently due by December 31, 2024, without any extensions announced. In previous financial years, however, the filing deadline for GSTR-9, and in some cases, GSTR-9C, was extended multiple times due to the form's complexity and filing difficulties. For example, taxpayers with an aggregate annual turnover of up to Rs.2 crore in FY 2021-22 were exempted from filing GSTR-9 by the CBIC. Additionally, the filing deadlines for FY 2020-21 and FY 2019-20 were extended to February 28, 2022, and March 31, 2021, respectively. Both chartered accountants and businesses have found recent GSTR-9 filings challenging, struggling to navigate the detailed form and reconcile it with their monthly and quarterly returns and accounting records. This document outlines several common issues that have historically contributed to these complexities and past deadline extensions.

Discrepancy in Input Tax Credit Between GSTR-2B/2A and GSTR-9 Table 8A

Taxpayers frequently encounter difficulties due to disparities in Input Tax Credit (ITC) figures. This often occurs between the auto-populated data in GSTR-2A/2B and the ITC auto-filled in Table 8A of GSTR-9. Several factors contribute to these mismatches:

• Final amended figures should be reported in GSTR-9, rather than the gross amounts found in GSTR-2A/2B.
• ITC related to invoices from periods when the recipient taxpayer operated under the Composition Scheme does not appear in GSTR-9.
• ITC on invoices where the place of supply is in the supplier's state instead of the recipient's state is excluded from GSTR-9.
• Differences arise from GST liability for FY 2022-23 that was reported in FY 2023-24 within the specified period.

Required Classification of Input Tax Credit in GSTR-9 and GSTR-9C

Forms GSTR-9 and GSTR-9C mandate a detailed breakdown of all Input Tax Credit (ITC) claimed, categorizing it into inputs, input services, and capital goods. This necessitates a comprehensive review of a taxpayer's accounting records and verification by an auditor. Many taxpayers do not routinely maintain such granular bifurcation, leading to significant effort and stress in compiling these details to ensure accurate reporting.

Input Tax Credit Claimed Not Appearing in GSTR-2A/2B

Many taxpayers have claimed eligible Input Tax Credit (ITC) in their GSTR-3B returns, as permitted by the CGST Act. However, a substantial portion of this claimed ITC might not be reflected in their GSTR-2A/2B statements. This discrepancy can lead to taxpayers receiving notices from the Tax Department.

Reporting ITC for Imported Goods Claimed in Subsequent Financial Years

Currently, there is no specific section in GSTR-9 for reporting Input Tax Credit (ITC) on goods imported in one financial year but claimed in the following year. Although the government has clarified that such ITC should be reported in Table 6(E) of GSTR-9, this table encompasses all ITC availed. For auditors, who rely on this information for reconciliation, a separate and more precise reporting field would simplify the process and improve data accuracy.

Overlapping Data in GSTR-9 Tables 6(B) and 6(H)

Table 6(B) of GSTR-9 requires reporting all inward supplies and Input Tax Credit (ITC) availed during the financial year, excluding imports and reverse charge liabilities. Conversely, Table 6(H) is for reporting ITC that was initially claimed, then reversed, and subsequently reclaimed within the same financial year. This has resulted in an overlap of figures between these two tables. While government clarifications have been issued to help taxpayers understand the definitions of these fields, further clarity with practical examples and solutions for accounting challenges is still needed.

Unclear Disclosure Requirements for Reverse Charge Mechanism (RCM) Liability in GSTR-9

The clarification from the CBIC regarding the disclosure of Reverse Charge Mechanism (RCM) liability, specifically for FY 2017-18 dues paid in FY 2018-19, has been ambiguous. A press release on June 4, 2019, referred to 'additional outward supply' without mentioning RCM, while a Central Tax notification on June 28, 2019, used the term 'additional liability.' Taxpayers are instructed to report the total of such undeclared liability under Table 4(G) of GSTR-9, with the corresponding tax portion to be declared under 'Tax Payable' in Table 9. The terminology inconsistency has created confusion.

HSN Summary Declaration for Outward and Inward Supplies

Suppliers are required to declare HSN (Harmonized System of Nomenclature) summary details. This includes four-digit HSN codes for B2B supplies with a turnover up to Rs.5 crore, and six-digit HSN reporting for those with turnover above Rs.5 crore. This requirement applies to both inward and outward supplies, although some taxpayers are exempt from reporting HSN for inward supplies that independently account for less than 10% of their total inward supply value. This mandate has posed significant challenges for taxpayers who previously did not maintain such detailed data, necessitating substantial additional time and effort to compile and report these specifics.

Ambiguity in Filling GSTR-9 Table 4(F)

GSTR-9 Table 4(F) is dedicated to reporting advances on which tax has been paid but for which invoices have not yet been issued. The guidance for this table suggests sourcing information from Table 11(A) of the GSTR-1 returns. While this approach is suitable for monthly data, it becomes problematic at an annual level because adjustments made throughout the year must be considered. Consequently, data should also be derived from Table 11(B) of the GSTR-1 returns to ensure accuracy.

Cumbersome Upload Process for GSTR-9C

The procedure for uploading GSTR-9C is complex, involving numerous technical steps. Many taxpayers find this process to be overly time-consuming and inconvenient.

Additional Challenges Encountered During GSTR-9 Filing

Beyond the issues mentioned above, taxpayers face several other problems when filing GSTR-9:

• Negative values pasted into the GSTR-9/9C offline utility are only permitted in Tables 5(M), 5(N), and 5(O). Although negative values can be pasted elsewhere and the JSON file generated, the GSTN system does not process them.
• JSON files sometimes fail to upload even when no errors are detected.
• In certain instances, two final PDF copies of the filed GSTR-9 return have been generated, an issue the GSTN portal is still addressing.
• Despite completing the set-off under DRC-03, taxpayers are sometimes unable to file the return.
• DRC-03 reflections are occasionally absent from the common portal.
• The splitting and bifurcation of expense ledgers in GSTR-9C is a highly time-consuming task with unclear relevance.